-

Retail acquisitions create a dominant regional food retailer

-

Spartan's neighborhood market strategy has successfully competed with Meijer's, Wal-mart and Kroger in several Michigan and Ohio Markets

-

Significant growth opportunities as a result of:

-

Acquisitions of retailers

-

Shift of business to higher margin segments of food industry

-

Synergies as a result of acquisition integration

-

Strong distribution base from which to grow retail operations

-

Experienced management team

-

Company Overview

-

1917 - Founded as Grand Rapids Wholesale Grocery (a non-profit co-op)

-

1969 - Converted to a for-profit corporation

-

1999 - Re-entered retail - in 18 month period increased retail sales to 18% of consolidated sales through acquisitions of four retail chains in Michigan

-

2000 - Will acquire 73 stores via pending merger with Seaway Food Town resulting in retail sales comprising 33% of consolidated sales

-

Quick Facts

-

9th largest supermarket distributor in U.S.

-

Distribute over 40,000 products (national & private label brands)

-

Serve 400 independently owned grocery stores

-

6th largest convenience store distributor serving 9,600 convenience stores in nine states

-

Approximately 22% of Michigan retail food sales begin with Spartan's supply chain

Grocery Distribution

67.5%

Convenience Distribution

31.5%

Insurance

0.6%

Real Estate

0.4%

-

Increasing retail revenues

Grocery Distribution

41.8%

Retail

32.7%

Convenience Distribution

24.8%

Insurance

0.4%

Real Estate

0.3%

*

Spartan Stores Retail
47 Locations

Distribution Center Locations:

[   ]

Spartan: Grocery

Seaway Food Town Inc.

Grand Rapids, MI

•

Food Town Supermarkets

Plymouth, MI

47 Locations

•

Deep Discount Drug Stores

[   ]

Spartan: Convenience

26 Locations

Grand Rapids, MI

Louisville, KY

[  ]

Grocery Distribution

Sandusky, OH

(MI, IN & OH)

Gahanna, OH

Convenience Distribution

[   ]

Seaway Food Town: Toledo, OH

MI, IL, IN, KY, OH, PA,

TN, GA, WV

-

Spartan supplied grocery stores have the leading market share in Michigan

Spartan Supplied

22.0%

Meijer

17.0%

Farmer Jack

12.0%

Kroger/Kessel

12.0%

Carter's Foods

3.0%

Super K-Mart

2.0%

L.A.S. Stores

2.0%

Roundy's Supplied

2.0%

Wal-Mart Supercenters

1.0%

-

Spartan's retail grocery stores have strong market share in their specific markets

Glen's Market - Northern Michigan

40%

Seaway - Greater Toledo, OH

33%

Family Fare/Great Day - Greater Grand Rapids, MI

19%

Ashcraft's Market - Central Michigan

19%

-

Dominant regional food retailer operating neighborhood markets with the scale and efficiency of a self-distributing chain

-

Capitalize on our 83 year history of being a partner to the neighborhood supermarket operator

-

Goal of reaching $7 billion in annual revenue by 2005

-

Position the Company as the neighborhood market while taking advantage of Spartan's overall scale

-

Focus on acquisitions throughout the Midwestern U.S. Become the acquirer of choice for high quality independent retail grocers who operate neighborhood markets

-

Create a Spartan retail marketing network

-

Continue to offer value-added wholesale services to existing distribution customers

-

Be a low cost, efficient operator

-

Continue position as value added partner to independent retail customers

-

Leverage strength as the #9 supermarket wholesaler

-

Leverage strength as the #6 convenience store wholesaler

-

Continue to rationalize products, services and operations to be the most cost effective wholesaler in markets served

-

Provides foundation for growth strategy

-

Alternative to the "supercenters"

-

Targeted merchandise selection recognizing unique demographics--with the scale and efficiencies of a self-distributing chain

-

Convenient locations

-

Pricing strategy

-

Employ high/low promotional merchandising message

-

Comprehensive "background" pricing program to identify margin opportunities within each category

-

Enhanced margin and sales by establishing "value" as the focus of marketing efforts

-

Superior quality "branded" perishable offerings

-

Deliver variety, quality, freshness and value to draw customers

-

Prepared foods

-

Introduction of innovative, fresh and convenient food service programs

-

Expanded multi-tiered private label program

-

Higher margins

-

Build brand and store loyalty

-

Create leverage with packaged good manufacturers

-

Special emphasis on in-store merchandising to drive sales and margin

-

Continue to remodel and develop stores to drive neighborhood market strategy

-

Synergistic approach to marketing and procurement to enhance margins and sales by bringing the benefits of a self-distributing chain to the independent grocer

-

Common marketing and promotional programs across banners

-

Common procurement programs

-

Benefits

-

Guaranteed execution to manufacturer

-

Reduces distribution and transportation costs

-

Increased impact of promotions across network

-

Reduced administrative cost for network participants

-

Bridge between traditional wholesale customers and acquired chains

-

Key element to earnings growth

-

Acquisition criteria

-

Exit strategy of choice for independent grocery retailers operating neighborhood markets

-

Consolidation of chains in contiguous markets throughout the Midwestern United States

-

Profitable stores that can benefit from more efficient management and increased buying leverage

-

Accretive to earnings within 12 to 24 months

-

Acquisitions are expected to add an additional 5%-10% revenue growth

-

Pharm concept as a potential fill-in/market segmentation opportunity

                    Company Name

Acquisition Date

Number of Stores

[Ashcraft's Markets Logo]

January 1999

8

[Family Fare Supermarkets Logo]

March 1999

13

[Glen's Markets Logo]

April 1999

23

[Great Day Food Centers Logo]

December 1999

3

[Food Town Super Markets Logo]

Announced:

April 7, 2000

[The Pharm Logo]

Terms:

$5.00 per share cash payment to Seaway shareholders; and Seaway shareholders receive one Spartan share for each Seaway share held.

Spartan shareholders exchange existing Spartan shares for 13.2 million shares of new Spartan Stores common stock

Ownership:

Spartan - 66.5%
Seaway - 33.5%

Number of Stores

Store Format

Number

Food Town

47

Pharm

26

Total

73

Sales

[chart]

1994

-

$546

1995

-

$559

1996

-

$598

1997

-

$608

1998

-

$625

1999

-

$659

Total Sales Growth

2.4%

6.8%

1.8%

2.8%

5.4%

Comparable Store Sales Growth

1.3

4.3

1.2

0.3

2.9

EBITDA

[chart]

1994

-

$20.2

1995

-

$23.8

1996

-

$27.2

1997

-

$28.7

1998

-

$29.5

1999

-

$30.4

-

Pharms are a hybrid supermarket/drugstore format with great market fill-in possibilities

-

Pharm represents a potential growth opportunity for Spartan.

-

Uniquely positioned to offer customers value and product offering not available from other retailers

-

Provides a competitive advantage with pharmacy and general merchandise

-

Acquisition synergies forecasted to result in at least $6 million in cost reductions during fiscal year ended March 31, 2002

-

Elimination of duplicative overhead

-

Merchandise procurement

-

Warehouse and transportation

-

Marketing programs

-

Expansion of private label program

-

Implementation of best practices across company

-

Increase EBITDA margin to between 3.5% and 4.0%

-

Drive distribution costs to best in class

-

Consolidate administrative functions

-

Consolidate purchasing functions

-

Leverage purchasing scale across operating units and customers served

-

Strong management team assembled to implement Spartan's vision

Name

Position

Years in
Industry

Years with
Company

Jim Meyer

President and Chief Executive Officer

26

26

Joel Barton

Vice President Spartan Stores Retail

27

1/2

Dave Couch

Vice President Information Technology

12

12

Dick Deming

Vice President Human Resources

2

2

Chuck Fosnaugh

Vice President Development

23

10

Mike Frank

Vice President Logistics

24

3

John Sommavilla

Vice President Purchasing

15

15

Dave Staples

Vice President Finance and Chief Financial Officer

4

1/2

-

Spartan has realized strong sales growth

1997

-

$2,475,025

1998

-

$2,489,250

1999

-

$2,671,700

2000

-

$3,050,282

-

With solid EBITDA performance

1997

-

41,650

1998

-

51,492

1999

-

57,162

2000

-

78,090

-

History of strong and improving financial performance

1999 PF

-

$3,603,143

2000 PF

-

$3,770,588

1999 PF

-

$111,796

2000 PF

-

$112,556

-

Pending Seaway merger creates a nearly $4.0 billion company with strong growth prospects

PF Spartan Stores

Seaway

PF Adjustments

PF Combined

Net Sales

$2 ,964,840

$638,303

$          -

$3,603,143

Gross Margin

423,021
14.3%

162,662
25.5%

-

585,683
16.3%

Operating Income (1)

43,778
1.5%

14,961
2.3%

1,137

57,582
1.6%

Adjusted EBITDA (1)

81,502
2.7%

30,294
4.7%

111,796
3.1%

Net Earnings (1)

12,560
0.4%

7,263
1.1%

(2,556)

17,267
0.5%

PF Spartan Stores

Seaway

PF Adjustments

PF Combined

Net Sales

$ 3,090,305

$ 680,284

$ -

$ 3,770,558

Gross Margin

426,518
13.8%

174,593
25.7%

-

601,110
15.9%

Operating Income (1), (2)

47,093
1.5%

16,184
2.4%

(1,137)

62,215
1.7%

Adjusted EBITDA (1), (2)

80,566
2.6%

31,990
4.7%

112,556
3.0%

Net Earnings (2)

17,429
0.6%

8,773
1.3%

(2,686)

24,116
0.6%

-

Conservative capitalization with flexibility to meet Spartan's future acquisition and growth needs

Mar. 31, 2000

Cash and Marketable Securities

$65,989

Other Current Assets

272,222

Other Assets

184,022

Net Property & Equipment

269,880

Total Assets

$792,113

Total Current Liabilities

$208,906

Current Portion of Long-term Debt

23,862

Long-term Debt & Capital Lease Obligations

342,920

Other Long-term Liabilities

15,480

Total Shareholders Equity

200,945

Total Liabilities and Shareholders' Equity

$792,113

Pro Forma Shares Outstanding

21,147

Total Debt to EBITDA

3.3x

-

Accelerate growth through retail acquisitions

-

Focus on neighborhood market strategy

-

Significant opportunities to streamline operations, reduce costs and create long-term shareholder value